Following Saudi Arabia’s declaration that it would reduce its oil output by one million barrels per day in July, oil prices increased on Monday.
North Sea Brent for August delivery was priced at 77.03 dollars a barrel (159 litres) on Monday morning. This is an increase of 90 cents from the previous day.
To reach $72.66 for delivery in July, the cost of a barrel of US West Texas Intermediate increased by 92 cents. Overnight, prices have sometimes increased even more sharply.
Saudi Arabia announced the drop on Sunday after a meeting of the oil cartel OPEC+, which lasted hours.
The move comes at a time when oil prices are falling as a result of a weakening global economy. Riyadh suggested it might be extended beyond July.
The oil price has been declining for over a year, with the exception of a small rise in April. OPEC oil had a barrel price of about 115 dollars by the middle of 2022.
The alliance, which has a 40% market share worldwide, chose to reduce production by two million barrels per day as early as October 2022.
However, the United Arab Emirates may be able to increase its output in some capacity in the upcoming year. This is unlike Saudi Arabia and other OPEC nations.
cc: Punch Ng
